There are signs of prosperity in the art market and things are beginning to look up. When it comes to art, there will always be collectors who can’t live without their next acquisition. Buying a Warhol is like buying gold, and after last year’s sagging auction sales, signs now point to go!

This Wednesday night, Sotheby’s in New York auctioned off several post-war and contemporary art pieces to a total of over $130 million. One of the top sales was an Andy Warhol piece entitled “200 One Dollar Bills,” which sold for $43.7 million. The circa-1962 piece was last sold by Sotheby’s over 20 years ago for $300,000…. a fantastic investment for that collector, a taxi-cab tycoon! The winning bid is thought to have  come from a phone bid, and far surpassed the $12 million estimate. In addition, another bidder paid $6.1 million for Warhol’s 1965 “Self Portrait.”

Sotheby’s reported total sales of $181,770,000 on and featured five works that sold for more than $10 million. The cautious auction house initially thought it would take in $115.3 million.

As for the auction bidders, they included some famous names such as fashion designer Valentino Garavani and jeweler Laurence Graff.

On the retail front, mega-dealer Larry Gagosian has recently opened up his first retail store on Madison Avenue in New York. Gagosian buys and sells hundreds of millions of dollars in paintings and sculptures each year and has galleries from New York, to LA, to his newest space in Athens, Greece. In his new retail shop, price points are much more accessible. Design objects like books, wallpaper, and furniture are for sale, as are posters and other works from his “stable” of artists: Ed Ruscha, Marc Newson, Jeff Koons, and Richard Prince.

Downstairs of the shop you’ll find “Other Criteria,” the art house created by Damien Hirst (Gagosian’s client) and others that offers limited-edition books, posters, magazines, and accessories. “Other Criteria” is based in London and the Madison Avenue store will be the first U.S. location. The Gagosian Gallery store will have a complete, publicly available archive of the gallery’s publications. Shown above are white-glazed porcelain “Puppy Vases” (1998) by Jeff Koons, in an edition of 3,000,000. They retail for $7,500 each plus shipping. Get ‘em while they’re hot!

It looks like we now have a “Madoff” of the art world. It was discovered this year that tennis champion John McEnroe was duped, along with Bank of America, investment firms, art owners and collectors in a complex $93 million art investment scam in New York. McEnroe reportedly lost $2 million after investing a half-share in two paintings: Arshile Gorky’s “Pirate I” and “Pirate II.”

Art dealer Lawrence Salander, 59, was arrested at his New York home, and he and his gallery were charged with more than 100 counts, including grand larceny and securities fraud, Manhattan District Attorney Robert Morgenthau told a news conference. He was initially arrested in March, but new charges were brought against him this July.

Salander in better times, 2007 [photo by Hans Gissiner]

Salander-O’Reilly Gallery had been one of New York City’s largest private galleries and was housed in an ornate, historic mansion on East 71st Street. Salander was forced to shutter it in 2007 amid a rash of lawsuits from consigners who said they had never been paid. He filed for bankruptcy a month later. The gallery’s director, Leigh Morse, has also been charged with numerous counts. Since Salander-O’Reilly’s closure she has opened up her own gallery and Salander himself was working at another gallery upstate. Morse is accused of grand larceny and scheming to defraud investors and artists, including the estate of Robert De Niro Sr., an Abstract Expressionist painter and the actor’s father.

The New York Times says that Robert M. Morgenthau, the Manhattan district attorney, has portrayed Mr. Salander as a charlatan in the art world, closing on fictitious sales — sometimes of works he did not own — and then using the money to pay off his sizable debt. So far, authorities have identified 26 victims of Salander’s scheme. It lasted from 1994 to 2007, and included luring investors who paid cash in exchange for shares of ownership of works of art. “He sold artwork not owned by him and kept the money and lured investment money in fraudulent investment opportunities,” Morgenthau said.  Salander used the money to fund “an extravagant lifestyle” of lavish parties and private jets, he said. At times, Morgenthau said, Salander inflated the value of paintings to score greater investments that were not returned to investors.

McEnroe was alerted to the scheme when he learned an art collector owned the same painting he had, authorities said. And the scam reaches far beyond the tennis court amd to a reported 28 victims. Other estates Salander looked after included paintings of the late father of actor Robert De Niro. Robert De Niro has organized exhibitions of his father’s works around the world and has said he keeps many of his works at home. Renaissance Art Investors, a company focused on investment in old master paintings, lost $45 million in the scheme, authorities said. Earl Davis, the son of American abstract painter Stuart Davis, lost $6.7 million, authorities said, while Bank of America lost $2 million after Salander lied about paintings he owned to secure a loan. Hester Diamond, the widow of late renowned New York art dealer Harold Diamond and mother of Beastie Boys’ “Mike D”, lost $6 million.

Salander under arrest, 2009 [courtesy New York Magazine]

For more information about the rise and fall of Salander, this is a great article: New York Magazine.

Michael Kessler Art Installation

The art market in New York is so different from the contemporary market in the Southwest and in our region that we might as well be on different planets. For our regional art market, prices are determined by the artist’s price list and recent sales. Most artists in this region increase their prices about 5-10% every few years; again, depending on sales and availability, as well as exhibitions and press, etc. Artists and their prices are rarely volatile and it’s even more rare to see decreases in their work’s value. Although you’re never going to make millions investing in regional artists, you’ll also never see huge decreases in value. Again, at Gallery MAR, we always recommend investing in art for yourself, for your life, and buying what you love.

But in New York, especially in the last few years (2000-2006) it has been “anything goes!”  for sales at the auction houses. Critics of this market say a lack of oversight in the art market permits manipulation (akin to Hedge-fund manipulation). Dealers, who can artificially inflate auction prices, or buyers who are “in” with the auction houses, can buy to drive up the market of their own collections. But others argue that the value of art isn’t determined by money. They say that the art world isn’t an industry and shouldn’t be treated as such.

It’s a fascinating topic and one that merits much discussion.

I was recently directed to this interesting conversation about the much-discussed high end contemporary art market. Amy Cappellazzo (deputy chairman at Christie’s), Chuck Close’s (artist with more than 150 solo exhibitions), and Jerry Saltz (senior art critic for New York magazine) argue against the motion that “The Art Market Is Less Ethical Than the Stock Market.” What’s your opinion? Listen and enjoy, then post your own position!